The details about negotiations are unclear, just like Microsoft’s exact proposal to AMD. However, since Microsoft has $95.3 billion in cash, whereas AMD’s market capitalization right now is $1.81 billion, the software giant may buy AMD relatively easily. In fact, current value of AMD is three times lower than the company paid for ATI Technologies in 2006.

Analysts estimate that Microsoft pays around $100 for every Xbox One system-on-chip to AMD. Life-to-date sales of Xbox One are around are around 12.6 million units, which means that Microsoft has already paid AMD around $1.26 billion for Xbox One chips. The acquisition of AMD could save it around a billion per year on Xbox One chips alone. It the company develops appropriate chips for smartphones and tablets, Microsoft’s savings could be even higher.

They normally have to refute this kind of stuff unless it is a done deal as it can greatly effect their stock price. Nearly every company that has been bought ever has said they are not up for sale prior to being bought out.

Yep that is true Dj but still I can't see it happening as AMD makes for both consoles the GPU and that is one sweet money earner.Got to mind AMD only got into this mess from buying a factory in Mexico that had hidden huge crippling debts before they bought it that sent them way back financially for the years after that.

If Intel can buy an AV firm then it's not really a stretch to think of a software company buying a chipmaker. Personally I hope it happens as you know they will try to make it a much more profitable spin-off should they offload it later.

They've got to worry about how intel will react, Intel will be very unhappy if Microsoft start making their own CPUs. Google had to be very careful they didn't piss off the other phone manufacturers when they started making the Nexus's.